By issuing the regulation, it's made clear that labor contracts with no fixed termination dates did not amount to lifetime contracts. The regulation listed 14 conditions under which an employer can terminate a labor contract. These included an employee's incompetence to live up to the job requirements, serious violations of regulations and dereliction of duty.

Liu Rui, Professor of Law in China National Scholl of Administration said "In the long run, the law is healthy for all the firms. The worst hit firms were those low efficient ones who only became profitable by taking advantage of their employees. It's one of the points of the law to drive those firms out of business anyway."

Another 13 circumstances were also included in the new regulation, under which an employee could terminate his or her contract with an employer, including delayed pay and forced labor.

The Legislative Affairs Office of the State Council issued a draft of the implementation regulation on May 8 to solicit public opinion. In two weeks, the office received over 80 thousand responses.

The National People's Congress Standing Committee said on Thursday it would start a law enforcement inspection at the end of September across the country.

(CCTV September 19, 2008)